Sirius Minerals PLC‘s (LON:SXX) takeover offer from Anglo American plc (LON:AAL) “does not represent fair value for shareholders” in the potash miner and the FTSE 100 company “would be willing to bid substantially more”, reckons hedge fund manager Odey Asset Management.

In an open letter to Sirius chief executive Chris Fraser and Anglo boss Mark Cutifani, dated on Tuesday and published on Wednesday, Odey manager Henry Steel noted that Anglo American has not declared its 5.5p per share offer for Sirius as a “final” offer deliberately “because there is a risk of both the deal failing at its current level, and of an interloper at a later stage”.

READ – Sirius Minerals: Hopes dashed as institutional investors snub alternative financing plan

Odey suggested that by doing this Anglo was giving itself the ability to make a counter bid if such an ‘interloper’ steps in.

“It is Odey’s opinion that such an interloper would most likely appear between the date that Sirius shareholders vote on the proposed transaction, and the date of the court hearing,” the letter read.

A shareholder vote on the offer is planned for 3 March, with three-quarters of those voting needing to be in favour of the bid for it to be completed. A court hearing is expected to be before 20 March.

“The lack of ‘final’ offer, in Odey’s opinion, suggests that AngloAmerican would be willing to bid substantially more for Sirius, with the investment case remaining highly attractive for AngloAmerican, even at a materially higher bid level.”

Sirius’s most recent accounts suggest an equity value of GBP893.1mln, a value that the portfolio manager argued is much higher than the GBP524mln Anglo offer recommended by the Sirius board and indicating the potential gains for whoever can fund the development of the Woodsmith mine.

Odey, having snapped up a 1.29% stake in Sirius on Wednesday, of which 15mln shares were bought at a price of 4.92p and the rest via CFDs at prices either side of 5p, said it will vote against any Anglo American offer that is not designated as “final” at this level.

But the hedge fund indicated that it would vote in favour of any bid at 7p or above.

Sirius shares rose 2% to 5.22p on Wednesday morning, their highest level this week.

Analyst John Meyer at broker SP Angel said on Tuesday that private investor opposition risks spoiling the deal.

“We have no axe to grind on the deal but common sense based on the public information we have indicates Anglo is the best deal Sirius is going to get,” he said.

“We sympathise with Sirius’ loss making shareholders and we wonder who is responsible for encouraging the shares to unrealistic levels?”

He added that investors “should be immensely grateful” that Anglo CEO Mark Cutifani is prepared to “stick his neck out and take this project on” and investors “should know not to look a gift horse in the mouth”.

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